Bakkt Sets December 9 to Launch Options

The Bakkt exchange will move beyond plain futures, and offer options from December 9.

The Bakkt exchange set a date for the launch of a new derivative product, options on Bitcoin (BTC) futures. The derivative is aiming to better offset BTC price fluctuations.

The Bakkt Bitcoin Options Contract will be based on monthly futures contracts.

“The Bakkt Bitcoin Options contract will be based on the benchmark Bakkt Monthly Bitcoin Futures contract and represents another important step in developing this asset class for institutional investors, their customers and investors,” announced Kelly Loeffler, CEO of Bakkt.

The new contract arrives as the Bakkt futures market is growing to record levels, and is based on consumer demand for the derivative. The presence of options means derivative exposure to BTC risk, hedging, and the potential for higher returns. The option is not tied to acquiring actual BTC, unlike the futures which deliver actual BTC upon expiration.

As of October 25, the Bakkt exchange traded 39 BTC, based on data from the tracking bot.

The effect of Bakkt trading is yet to be estimated. The volumes on the exchange are tiny in comparison to crypto-to-crypto markets. The Binance futures market is much more active as well. But the Bakkt exchange attracts scrutiny as it offers new institutional options to invest in BTC.

The question remains whether Bakkt has affected the BTC market, so that prices are now falling faster. BTC broke below the $10,000 mark once Bakkt launched on September 23, and is now around the $7,500 mark.

Futures and options may serve as a hedge to volatility, when BTC moves by hundreds of dollars in either direction. So far, there are no signs that miners have attempted to trade the futures. But data from the CME reveals that some miners may be using the market to secure better and more predictable prices.

However, recent commentary by Chris Giancarlo, former head of the Commodities Futures Trading Commission, suggested BTC may have been pushed down from its peak by the futures market.

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